Latest data from CINNO • IC Research reveals that total investment in China's semiconductor industry, including Taiwan, reached a staggering 800.2 billion yuan in the first half of 2026. This marks a substantial 72.4% year-on-year increase, signaling a major expansion in investment scale. The growth is fueled by concentrated demand from sectors such as AI computing power and automotive-grade chips, while industry capital is strategically pivoting towards high-barrier segments of the supply chain amid a global reshuffle.
Investment dynamics vary significantly across regions due to differing industrial bases and external conditions. Mature markets are primarily driven by global customer orders and market demand. In contrast, mainland China is witnessing accelerated capital concentration in areas like equipment, materials, and advanced packaging, propelled by supply chain self-sufficiency goals and shifting external circumstances. The growth rates and capital shares of specific sub-sectors have diverged notably, marking a fundamental shift in investment priorities compared to previous years.
The first half of 2026 shows investment trends deeply intertwined with industry changes. The strategy has moved beyond mere manufacturing scale expansion towards a balanced approach. Capital is now being channelled towards high-growth advanced packaging and semiconductor materials with domestic substitution potential. Simultaneously, there is continued investment in specialty wafer process expansion and increased R&D in equipment, all part of an effort to optimize investment structure and counter external pressures while building momentum for technological breakthroughs.
Wafer Fabrication Investment Leads the Pack
Wafer fabrication attracted 452.7 billion yuan, accounting for 56.6% of the total industry investment. This represents a robust 93.4% year-on-year growth, outpacing the industry average. While capacity for mature process nodes in traditional consumer electronics is nearing saturation and related expansion projects have decreased, a surge in new production lines for AI memory chips and automotive-grade power specialty processes has kept the manufacturing segment at the forefront, with over half of all funds still directed here.
Materials and Design Show Steady Growth
The semiconductor materials segment received 74.9 billion yuan, making up 9.4% of total investment, a 38.9% increase year-on-year. Capital allocation within this sector is heavily skewed towards high-end categories, with the share for high-value-added materials rising significantly. Chip design investment reached 107.3 billion yuan, or 13.4% of the total, growing 18.4%. Funds are now concentrated in high-barrier niches like computing power and automotive applications, while investment in low-end consumer chips has cooled considerably.
Packaging and Testing Segment Witnesses Explosive Growth
The packaging and testing sector saw investment surge to 137.3 billion yuan, a 225.5% year-on-year jump and the fastest growth rate among all segments. The acute shortage of advanced packaging capacity for technologies like HBM and 3D stacking is driving massive capital inflows, with the sector's capital share expanding several-fold compared to previous years.
Equipment Investment Contracts Amidst Export Controls
In contrast, semiconductor equipment investment contracted by 35.0% to 28.2 billion yuan, marking the only segment to see a decline. This downturn is primarily attributed to intensified export controls from the US, Japan, and the Netherlands, which have hampered equipment imports and led to a short-term pullback as the market digests existing orders. Despite this, the strategic importance of the equipment sector remains undiminished. Leading companies are expanding against the tide, and industry consolidation is accelerating, with capital shifting from broad-based investment to a focus on backing key players and pursuing mergers.
CXMT's Landmark IPO Catalyzes Storage Investment Drive
A pivotal event in H1 2026 was the successful listing of ChangXin Memory Technologies (CXMT), the domestic DRAM leader, on the STAR Market. This IPO, raising an initial 29.5 billion yuan, stands as the largest on the A-share market in 2026 and the second-largest in STAR Market history. The company's journey from application acceptance to approval took just 148 days, setting a new speed record for large semiconductor companies. The raised funds are fully dedicated to core operations: 7.5 billion yuan for upgrading and expanding 12-inch wafer production lines, 13 billion yuan for developing advanced DRAM processes like 17nm-class DDR5 and LPDDR5X, and 9 billion yuan for R&D into forward-looking technologies such as HBM and 3D stacked DRAM.
CXMT's influence extends far beyond its own investment. Its chain-owner effect is driving collaborative expansion across the supply chain through equipment procurement, material adoption, and packaging support. Approximately 22.0 billion yuan from its IPO is earmarked for equipment purchases, providing strong, reliable order pipelines for domestic equipment leaders like NAURA Technology Group and Piotech. Furthermore, the process migration from 19nm to 17nm is directly boosting investment in 12-inch storage-grade silicon wafers and high-end electronic chemicals. Its forward-looking HBM and 3D stacking initiatives also create technical synergies with the explosive growth in the packaging and testing sector, pulling downstream demand for advanced packaging. This chain-owner investment expansion is a primary driver behind the overall scale and structural reshaping of investment in the first half of 2026.
Capital Concentrates in the Yangtze River Delta Region
Geographically, investment within mainland China is highly concentrated, with the top five regions attracting over 70% of domestic industry funds. Anhui leads with 46.1 billion yuan, accounting for 19.1% of mainland investment, buoyed by its strong memory chip and third-generation semiconductor clusters. Jiangsu follows with 44.59 billion yuan (18.5%), leveraging its complete wafer fabrication and packaging industry chain. Shanghai holds a 17.5% share, focusing on high-end R&D. Guangdong and Zhejiang round out the top five with 11.7% and 10.5% of funds, respectively. This regional concentration is driven by the cost advantages of a complete supply chain in the Yangtze River Delta and targeted regional industrial policies that guide capital into specific clusters.
Material Investment Shifts Focus to High-Tech Consumables
In the materials sector, investment is rapidly concentrating in core consumables. Capital is increasingly flowing into high-tech-barrier categories like electronic chemicals and specialty electronic gases. The usage and value of materials such as photoresists and wet electronic chemicals are rising in tandem with advanced 12-inch processes, driving investment growth in these sub-sectors well above the overall materials segment average. This trend signifies a deep shift in the investment logic for materials, moving from broad capacity expansion to a focus on quality enhancement and tackling technical challenges. The entire silicon industry chain attracted 34.64 billion yuan, with 19.24 billion yuan directed to silicon substrate wafers, particularly 12-inch automotive-grade and memory-grade wafers. Investments in upstream electronic-grade polysilicon and single-crystal ingots totaled 15.4 billion yuan. Electronic chemicals and specialty gases drew 7.63 billion yuan (11.2%) and 6.06 billion yuan (8.9%), respectively. These three core material categories now command over 60% of all materials investment, highlighting a clear focus on the most critical and continuously consumed parts of the supply chain.
Path Forward: Entering an Era of Precision and Performance
Looking ahead, the industry is entering a phase of meticulous development. Domestically, the trajectory of future investment will depend on the capacity of high-growth sectors like advanced packaging and core materials to absorb incremental capital, as well as the continued optimization of fund allocation through industrial policy. On the global stage, while overseas capital focuses on advanced process nodes and AI-related facilities, China's substantial investment volume is creating its own distinct momentum. The combined forces of the Big Fund's precise guidance and the market-driven pull of chain-owner companies are steering China's semiconductor industry from the “policy support period” into a “performance delivery period,” establishing a positive cycle of capacity release and investment expansion.